What does the Future of Accounting look like?

Living in the Age of Disruption

At one point in time, we thought hailing cabs on the street is the only way of getting a cab in Singapore. Standing under the scorching hot sun on sunny days for 10-15 minutes just before the torturing experience ends. On rainy days, things can get a lot worse. You're rushing for that important meetings or dinner appointments and yet, you've been stuck in the customer booking hotline for at least 20 minutes.

The birth of Uber and Grab changes everything, even our thoughts now on the only way of getting a cab. For those of us who've been spoilt with hailing a ride with just few moves of the fingers, have forgotten that these days, the cabs on the road will still stop if you hail them on the street side. For the millenial generation and beyond, this is the only way they know of hailing a ride.

We're living in the age of disruption. As accountants, are we safe from being disrupted and made irrelevant by technology? My answer is NO. Disruption knows no boundaries and it's only a matter of time before the inefficient way of doing things will be replaced by a more efficient way of doing things.

Staying Relevant as Bookkeepers and Accountants

The same applies to the accounting industry and profession. Over the many years working with and as accountants, we found one problem that is common across. Such endemic is common whether you are an auditor working in an accounting firm, or you are a financial accountant working in service companies, or you are a cost accountant working in manufacturing companies, or you are a bookkeeper (cum admin in many instances) in trading firms.

That one problem is we, as accountant and bookkeeper, tend to perform too many tasks that are repeated, tedious and boring. Often at times, we need to copy paste numbers from one spreadsheet to another. At other times, we need to do eyeball checking to perform accounting tasks like bank reconciliation. As timeless wisdom tells us - to err is human.

Fortunately, many of these tasks can be reduced or eliminated. However, the amount of reduction and elimination is heavily determined by your business, bookkeeping and accounting process design. Remember that a tool is only as good as how you use it. Then there’s Bill Gates’ first rule of technology which when translated into accounting terms, it will be automation applied to inefficient business and accounting process will magnify the inefficiency.

This is so very true. I’ve seen how poorly designed expense claim flow incur such heavy administrative duties. The process of submitting an expense claim can be a drag. The process of processing the claim can turn into nightmare decorated with human errors and frustrations.

To be fair, such cumbersome accounting process is not the fault of individuals but rather how we works as society and how hard works rather than smart works are rewarded. Whether it is in banking or any corporate organisation, I’ve seen employees sticking around in the office longer just so that they are perceived as hard working. This is an observation that is not solely applicable to bookeepers and accountants but many other professions in general.

DNA for Survival

At InstabooksAsia, we approach work differently. One core philosophy that governs every aspect of our process design is the Don’t Repeat Yourself (DRY) principle. If you can make it part of your DNA, you can be assured that beautiful processes will emerge as a result. Back to the claim process example, you will see beautiful marriage between technologies, tools and work culture.

From our years of experiences, we've seen different both the good and ugly sides of how companies are doing their bookkeeping and accounting. Cloud accounting software like Xero serves only as a tool. It is not a silver bullet to your bookkeeping and accounting nightmares. We've seen extremely poor chart of accounts design. We've also seen well-thought out chart of accounts design. Xero's famous tagline - Beautiful Business & Accounting Software - will only resonate with you if you're doing it right.

When migrating from legacy systems to cloud bookkeeping and accounting, don't lose sight on the process and human aspects. Software and technologies are supposed to make our lives easier. If it doesn't and creating more hassle, it's probably good to go back to drawing board and identify where optimisation can be introduced.

The other thing that we keep laser sharp focus on is the value and impact of our works. The outcome of our team of bookkeepers and accountants is not measured by the number of lines of bank reconciliation they can finish. One metrics we use is how much we can make ourselves redundant. One example is the number of business rules that can be applied and the number of lines that can be automated. The more lines that can be automated, the more redundant we’ve made ourselves. And we see that as a good thing because only then the team will have more time to work on more challenging assignments.

What do we mean by more challenging assignments? As a premiere boutique bookkeeping and accounting firm, our work goes beyond producing timely and regulatory-compliant accounting reports. We bring transparency into the financial health of our clients' business and escalate areas of concern before they snowball into survival-threatening issues. We provide financial discipline and accounting guidelines to assist our clients in making strategic decisions.

We are living in the age of disruption. As bookkeepers and accountants, we have to change the way we see value in our works or we will be phased out. Borrowing Steve Jobs’ quote on death - … death is very likely the single best invention of life. It is life’s change agent, it clears out the old to make way for the new. The choice is clear for us to make - change or be replaced. ​